(Page 626)

On page 6, the column just to the right of the red column is truckers; from there, the sixth of the black columns from the red one is classified laborers; sectionmen is the fifth from the right.

BY MR. ARONSON:

Q. You don't have as many railroad classifications in five and six as you do in the earlier tables, do you? A. There are apparently four fewer. These exhibits were not all prepared at the same time. I believe the last of these was the first to be prepared, and apparently a decision was made to include a few more groups for comparison after the first of them had been prepared.

BY THE CHAIRMAN:

Q. That is, for manufacturing and for common labor in construction, twenty-four so-called sub-standard classes are used in comparison, but in connection with common labor in road building, twenty such classes are used in comparison?

A. Yes. I have no further comment to make on this exhibit.

MR. FRANK L. MULHOLLAND: Mr. Chairman, I now lay before you an exhibit captioned "The exceptionally burdensome effect of rising prices upon employees in substandard wage brackets," which I will ask to have marked for purposes of identification as Employees' Exhibit No. 23.

BY MR. FRANK L. MULHOLLAND:

(The exhibit referred to was marked Employees' Exhibit No. 23, for identification.)

Q. Mr. Oliver, if you are ready, you may proceed with your explanation of Employees' Exhibit No. 23. A. Employees' Exhibit No. 23 deals with the variation in the effect of increases in the cost of living with respect especially to lower paid groups. Its central point is that the cost of food has risen much more than the cost of living generally and that while for measuring the cost of living a single weight is used for food prices,

(Page 628)

that weight is not applicable to lower paid groups, and that as a matter of fact the weight there, if a cost of living for said groups could be separately computed, would be much greater for food than it is in the general population. The first page of the exhibit indicates the proportion of the income of wage earners and clerical workers in various groups which was spent for food, clothing, housing and the other elements in the total family budget. This table and the graph at the left were taken from the publication of the Bureau of Labor Statistics of the United States Department of Labor. The study was based on 42 cities for the period 1934 to 1936. At the right of the table it will be noted that families with annual net income of under $1,200 spent 36.2 per cent of their income for food, that those with income from $1,200 to $1,800 spent 33.9 per cent of their income for food, and that those with incomes from $1,800 and over spent 31.7 per cent of their income for food. The average for all of these families is, of course, as shown there, 33.5 per cent.

(Page 629)

The Bureau of Labor Statistics used as a weight for the food group in its total cost of living index the figure of 33.9 per cent.

The graphic representation at the left shows the variation for the various income groups in the proportions or in the amounts spent for food. It will be noted in the graphic representation, the first set of bars at the top of the page, that the double cross hatch group under $1,200 spent more than either of the other groups and more than the average, in terms of per cent, of the total family expenditure for food.

It should be noted that the brackets under $1,200, from $1,200 to $1,800, and from $1,800 and over have not the same significance now that they had in 1934 and 1936. A family with a substantially higher income, perhaps a 25 per cent higher income, although that cannot be accurately calculated, would be in the same relative position as a family of $1,200 in 1934 and 1936. So that these percentages are now characteristic or would very likely be characteristic of the higher paid groups or the brackets higher than these.

The second page of the exhibit deals with the same central problem and presents the figures of the National

(Page 630)

Resources Committee, derived from a study of consumer expenditures in the United States.

This shows the percentages spent for food and other items in the household budget on a much more detailed basis than the preceding table.

For families whose incomes in 1935 and 1936 were under $500, 44.5 per cent of the total expenditures were for food.

Those with incomes between $500 and $750 spent 42.3 per cent of their income for food.

Those with incomes from $750 to $1,000 spent 40.3 per cent for food.

And so on down this table.

The average for all income groups is 33.6 per cent spent for food, which compares fairly closely with the weights used by the Bureau of Labor Statistics in calculating changes in the cost of living in the United States.

In this instance the income brackets ought to be modified, if they are to be characteristic of present day income distribution, by approximately 25 per cent. That is to say, the $1,000 level ought to be approximately

(Page 631)

$1,250.

It would be characteristic, I should say, if we may transfer this distribution to the present time, of the $1,250 group, those receiving approximately between $1,000 and $1,250, that they would have spent 40 per cent of their income for food.

Page 3 of the exhibit sets forth the changes in the cost of food as reported by the United States Bureau of Labor Statistics from December 15, 1940 for various periods down to the 15th of December, 1942.

For the United States as a whole, the increase in food costs over this period was 36.4 per cent, which is substantially higher than the increase in the total cost of living.

There is set forth in the succeeding vertical columns the changes in the cost of food for each of the principal cities covered in the index. They are grouped by regions.

Among the significant facts in this table is that the greater increase in the cost of food has taken place in the sections of the United States where wage rates, especially of these railway groups, are the lowest.

(Page 632)

On Page 4 it is shown that ten out of twelve southern cities have increases in the cost of food greater than the national average of 36.4 per cent.

The only cities of these southern points listed which had a smaller increase in the cost of food than the national average were Birmingham and Houston.

Atlanta had an increase of 36.8 per cent, comparing with the national average of 36.4.

Baltimore, 41.8.

Jacksonville, 41.7.

Norfolk, 40.5.

Richmond, 38.9.

Savannah, 37.3.

Washington, D. C., 37.4.

Memphis, 43.4.

Mobile, 42.1.

And New Orleans, 42.2 per cent increase in the price of food.

It is in that general area that wage rates are lowest on the railways and it is in that area that the increases in the cost of food have been greatest.

(Page 633)

The intent of the exhibit is to indicate, although it is impossible exactly to calculate, the much greater impact in the rise in living costs upon these groups in the lowest paid brackets in the railway service. It is shown both in terms of variation in the proportion of income that must be spent for food and also in the variation of increase as between those sections of the country where the proportion of the lowest paid group is greatest. I believe the central fact is sufficiently clear. There have been some general comments on the situation. The Lane Committee Report, to which reference has been made during this hearing, commented to the effect that increases in living costs were most severe in their effects upon lower paid groups-that was during the price rise of the First World War-pointing out that among other factors the low paid groups were unable to substitute or to get the advantages of the same kinds of shopping opportunities that are available to less low paid employees.

(Page 634)

That is to say, such things as quantity buying, although I think that was not specifically referred to in the Lane Commission report, which was available to persons of higher income and not available to those of lower income.

BY MR. ARONSON:

Q. They are not available just now, are they, with rationing?

A. It depends on the food. There are still quite a few articles, both of food and clothing, that are not yet rationed.

BY MR. MULHOLLAND:

Q. Have you finished?

A. I have finished; yes.

THE CHAIRMAN: I think we will have a short recess before you continue, Mr. Mulholland.

(Whereupon, a short recess was taken.)

MR. MULHOLLAND: Mr. Chairman, I now hand you an exhibit, captioned "Grossly inadequate annual income of railroad workers in substandard wage groups," which I ask to have marked as Employees' Exhibit 24 purposes of identification.

for

(Page 635)

THE CHAIRMAN: That is received for identification as Employees' Exhibit 24.

BY MR. MULHOLLAND:

(The document referred to was thereupon marked for identification Employees' Exhibit No. 24.)

Q. Mr. Oliver, referring to Employees' Exhibit 24, I will ask you to explain that exhibit to the Board, please.

A. Employees' Exhibit 24 is an attempt to put before this Board something which can be used as a gauge in considering the actual annual earnings of these lower paid employees represented here.

Its foundation is a budget prepared by the Works Progress Administration, Division of Social Research, in 1937, or at least published in 1937, for use in the work of the Works Progress Administration.

The first page perhaps should be passed over for a description which appears on page 2 and on page 3 of the standard that underlies the actual money figures on budget 1.

On page 2 of the exhibit there is a discussion of it, furnished by the Bureau of Labor Statistics of the

(Page 636)

Department of Labor. As the quotation given on page 2 indicates, the Works Progress Administration established the budget in order to measure the cost of approximately the same level of living and to avoid differences due entirely to variation in income and in local habits and customs, in order that they might compare the cost of living in different cities of the country.

The Department of Labor says:

"This is not an official budget of the Department of Labor nor does it represent a recommended standard of living."

Further down, the third paragraph, this quotation says:

"The family budget devised by the Works Progress Administration in 1935 is made up of a list of goods and services which they estimated were needed by a four-person family of an unskilled manual worker living at the maintenance level. The maintenance level is described as above the minimum of subsistence level or the emergency level of relief budgets, but below the standard of the skilled worker. It is stated that it does not approach the point of what may be considered a satisfactory American standard of living."

(Page 637)

There is a further description of it in the next paragraph:

"The hypothetical family for which the budget was prepared is made up, according to the Works Progress Administration, of a moderately active man who wears overalls at work, has a wife, a boy aged 11, and a girl aged 8. No household help is employed. The family lives in a four or five-room house or apartment, with an indoor bath and toilet, has gas, electricity and a small radio, uses ice for refrigeration and

has no automobile. They read a daily newspaper and go to the movies once a week. Their food is an adequate diet at minimum cost. They pay for their own medical care. No savings other than life insurance are provided."

That is, I think, a brief summary that indicates the level on which this budget has been prepared. The budget was priced originally by the Works Progress Administration and its cost has been kept up to date by the Bureau of Labor Statistics through the application of its cost of living index.

BY MR. FITCH:

(Page 638)

Q. Mr. Oliver, the material on page 2, is taken from some publication of the Bureau of Labor Statistics. Is that indicated here?

A. The material there shown has been used as a preface for the publication of this inter-city difference in several different releases I have seen. I believe this is the standard preface.

Q. If you could indicate the Monthly Labor Review, or some other regular publication where that appears

A. The note on the first page "Estimated inter-city differences in cost of living, September, 1942, is one of a series of publications."

Q. I know what it is. I have seen it, but if I could get the date at which this particular description appears. I don't remember seeing all of this in any one place. I imagine it appears in some issue of the Monthly Labor Review.

A. I believe it is a separate press release. If you will look at the last paragraph on the second page it says, "Table 1 shows the estimated dollar cost of the maintenance budget in 33 large cities as of September 15,

(Page 639)

1942. Table 2 presents this data on the basis of the cost in Washington, D. C., at that date as 100."
The publication is as of September 15, 1942, probably published somewhat later in the fall.

MR. MULHOLLAND: It will be satisfactory if we ascertain that definitely and hand it to you later?
MR. FITCH: Yes.

THE WITNESS: The budget was originally priced in 1935. It has never been completely repriced since, but has been kept up to date by the application of the index of the cost of living change.

(Page 640)

On page 1, then, the cost of living in 33 cities on this standard is set forth. The total cost of living and the cost of the food, clothing, housing, fuel and light, furniture, furnishings, household equipment and miscellaneous groups of commodities and services are shown.

Under the heading "total" the column numbered two, is shown the cost of the total budget in each of the various cities.

The range is up to the high point, which is the City of Washington, D. C., of $1,731.88.

The median for the group is approximately $1,575. I believe the city of Los Angeles, with $1,574.91, is the median city as of September 15, 1942.

BY THE CHAIRMAN:

Q. It should be noted, should it not, Mr. Oliver, that these cities are not arranged according to totals, but are arranged alphabetically?

A. The cities are arranged alphabetically by the names of the city, so that the range of the total costs is not in that order.

Q. It may be that Washington, D. C. is the highest on the list and happens to be the last on the list, but

(Page 641)

I refer, for example, to New York, with $1,722.72, somewhere approaching Washington, is much further up the

Q. These cities are arranged alphabetically and not on the scale of the cost of living according to this budget?

A. That is right. This list is sometimes published in the ranking of cities, so that the point should be made very clear.

Among the higher cities are Boston, Chicago, Cleveland, Detroit, Minneapolis, New York, PhiladelphiaPhiladelphia is lower-Pittsburgh, but the mid point, as I said, is about $1,575. There is no average for the whole group. It probably would not be sound to construct an average. The median is probably the most representative value to be used for the entire group.

Q. Here again I think you ought to point out that Los Angeles, for example, which is almost at mid point

(Page 642)

alphabetically is not the median because it happens to appear that way?

A. Yes.

Q. The median is something that you have worked out in the ranking of cities?

A. Yes. Median in this connection, I believe, normally means the mid point if all of the values are arranged according to rank in size. So that while Los Angeles is at nearly mid point alphabetically, that is not the reason why I refer to it as the median city.

BY MR. FITCH:

Q. The same point appears that by reason of the fact Mobile, which is about two-thirds of the way down, is apparently among the lowest?

A. Yes, it is among the lowest. On the other hand, Scranton, which is almost at the bottom, is almost exactly at the median point. It is between Los Angeles and Scranton, as a matter of fact.

That refers to the amount of the cost of living rather than to the alphabetical order of the cities.
From that as a base I should like to call attention now to the figures appearing on page 4 of this exhibit.

(Page 643)

Page 4 shows the average hourly earnings of 17 classes of railroad workers in the industries with substandard wage brackets. The reason for the appearance of 17 rather than 20 there is that we have excluded from this table those groups to which I referred as occasionally being composed of a relatively high proportion of immature persons. Messenger boys and office assistants, for example, and apprentices in the shops are excluded from this total table. So that the comparison with the cost of living on the standard referred to will be only for groups in which the employees are typically mature and who are expected to have normal family responsibilities.

Page 4 shows the average hourly earnings for each of the first twelve months of 1942 for these 17 classes, and shows in the right hand column the weighted average for the entire period January to October for each group. The purpose of calculating and introducing that here is to provide a basis on which a comparison of annual earnings may be made. These figures are all arrived at by dividing the compensation by the number of hours worked, as shown in the I.C.C. statement M-300.

(Page 644)

The range of weighted average hourly earnings is from the low of 43.1 cents paid to waiters, camp cooks, kitchen helpers and so forth

MR. ARONSON: That does not include tips of waiters, does it?

THE WITNESS: I was about to say that. If you had permitted me to finish that sentence you would have found out.

MR. ARONSON: All right. Just too impatient.

MR. MULHOLLAND: I do not wish to be critical, but I would rather have the other side not argue this case. THE CHAIRMAN: There has been a minimum of that here.

MR. MULHOLLAND: Yes.

THE CHAIRMAN: I think we have been getting along very nicely indeed.

THE WITNESS: That group is probably not so representative of the rates paid other groups, because there are some elements in there also of subsistence. I cannot testify as to the factors which will affect that rate, but I would want to indicate that it is probably not as representative as the others.